Most competitive wind could exist without subsidy says report

A further 1GW of onshore wind capacity could be added to the UK’s network, according to a report by Baringa Partners.

Adding the turbines would come at no extra cost to the consumer above the long-term price of power if wind farms were able to compete in auctions for contracts, the study found.

The report predicted that such an auction would clear at £49.40 per MWh, meaning wind farms would receive small “top-up” payments above the wholesale price of power in the first years of their operation, before paying back a greater amount over the remainder of their contract as the wholesale power price increases.

Installing a further 1GW of capacity – mostly in Scotland – is forecast to trigger a further £1 billion of investment.

Onshore wind on track

Niall Stuart, Chief Executive of trade body Scottish Renewables, which commissioned the report, said: “The UK Government has already published research showing that onshore wind is on track to be the cheapest form of electricity generation in the UK, and this report shows that the industry is continuing to drive down costs.

“The study’s findings reinforce that onshore wind can make a significant contribution to ministers’ ambitions for the Industrial Strategy.

“Crucially this is the first analysis of its kind that shows investment in the most competitive onshore wind projects can now be delivered in a way that is in line with the Conservative manifesto pledge to end new subsidies for the sector.

Projects would be expected to receive limited ‘top-up’ payments in the first years of their operation, but would then pay those back – and more – in the latter years of their contract, meaning an overall saving for consumers.

“However, the report also shows that we will only deliver those benefits at scale if onshore wind and other mature renewables are able to bid again for long-term contracts for clean electricity generation,” added Stuart.